JAKARTA, Indonesia – Indonesia's central bank governor was arrested Thursday in connection with an $11 million corruption case — the latest in a string of scandals to hit the bank, an anti-graft body said.
Burhanuddin Abdullah — who has denied wrongdoing — will be detained for 20 days while authorities complete their investigation into the misappropriation of bank funds, said Johan Budi, a spokesman for the Corruption Eradication Commission.
But he said there was enough evidence to show that Bank Indonesia's outgoing chief and other officials transferred $11 million to several former members of parliament in 2004 to help pave the way for the passage of amendments to the central bank law.
The bank has been the subject of several investigations since the 1997-98 financial crisis, when it lent billions of dollars in emergency funds to banks that later closed without paying their debts. It has struggled since then to shake off concerns about its integrity despite reforms.
Abdullah was named a corruption suspect in February and his detention was widely expected.
Some analysts believe the case may have been politically motivated — it forced Abdullah to say he would not seek re-election when his five-year term expires on May 17.
Parliament on Monday picked Senior Economic Minister Boediono, who goes by a single name, as his successor.
Two other central bank officials were detained in the case in February, but no former lawmakers have been arrested.
In 2002, the Central Jakarta District Court had found Abdullah's predecessor, Syahril Sabirin, guilty of illegally transferring US$80 million to senior politicians, but a higher court overturned the verdict a few months later.
Boediono said Monday he would improve morale at the central bank and aim to stamp out the culture of corruption.